In re 5444 Hermosillo Ave., Atascadero California

In re 5444 Hermosillo Ave., Atascadero California, 26CVP-0020

Hearing: Petition for Appointment of Receiver

Date: August 25, 2026

City of Atascadero (City) seeks appointment of a receiver to take control over the real property commonly known as 5444 Hermosilla Avenue in the City of Atascadero, California (Property) pursuant to Health and Safety Code (HSC) section 17980.7, subdivision (c). The statute provides cities with expedient enforcement measures to rehabilitate substandard housing that currently endangers the health and safety of residents and the public.

The Property was owned by the late William F. Panos. On June 15, 2026, Sandra Souza (Souza) was appointed as the representative for Mr. Panos’s estate. On June 26, 2026, a stipulated order was entered whereby Souza’s attorney agreed to accept service of the summons and the petition for receivership effective June 25, 2026, and the hearing on the petition was set for August 25, 2026.

I.

Legal Standard

When a building is maintained in a manner that violates state or local building maintenance regulations and “the violations are so extensive and of such a nature that the health and safety of residents or the public is substantially endangered” (HSC § 17980.6), the local enforcement agency may issue a notice and order requiring repair or abatement of unlawful conditions. (City of Santa Monica v. Gonzalez (2008) 43 Cal.4th 905, 919-920.) If the owner of the building thereafter fails to comply with the notice and order in a reasonable period of time, the enforcement agency can seek an order from the trial court appointing a receiver to oversee compliance. (Id. at p. 921; see HSC § 17980.7, subd. (c).)

The enforcement agency must show the following two factors to obtain appointment of a receiver: (1) the owner has been afforded a reasonable opportunity to correct the conditions cited in the notice of violation and (2) the proposed receiver has demonstrated a capacity and expertise to develop and supervise a viable financial construction plan for the satisfactory rehabilitation of the building. (HSC § 17980.7, subds. (c)(1), (c)(2).)

This statutory framework requires that “The petition shall be served on the owner pursuant to Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure.” (HSC § 17980.7, subd. (c).)

II.

Discussion

Souza argues that a “[r]eceivership is unnecessary and duplicative here because the probate court already supervises the estate, the personal representative is actively managing and marketing the

property, and a pending sale process—including cash offers and a cleanup commitment as part of the transaction—addresses the City’s concerns without the additional expense and administrative burden of a receiver.” (Response, p. 1, lns. 23-28.) She further argues that Code of Civil Procedure section 564(b) requires that the property is in danger of being lost, removed, or materially injured for a receiver to be appointed, and such danger does not exist. (Response, p. 3, lns. 10-17.)

These arguments are unpersuasive as City seeks a receiver pursuant to HSC section 17980.7, subdivision (c) which requires only that (1) the owner has been afforded a reasonable opportunity to correct the conditions cited in the notice of violation and (2) the proposed receiver has demonstrated a capacity and expertise to develop and supervise a viable financial construction plan for the satisfactory rehabilitation of the building. Souza does not address these grounds for appointment of a receiver.

City presents the declaration of Code Enforcement Officer Ayla Tomac (Tomac Dec.) that provides the there was a structure fire at the Property on November 21, 2024, which significantly damaged the residence. As of January 22, 2025, there was trash and other rubbish piled in the back yard and several utility sheds that people were living in. (Tomac Dec., ¶ 2.) Ms. Tomac spoke with the occupants of the sheds in person and by telephone advising them they could not live in the sheds. She advised them of the things they needed to do to bring the property into legal compliance with City codes. (Tomac Dec., ¶ 3.)

Ms. Tomac witnessed violations of Atascadero Municipal Code section 6-4.103(a) (accumulation of excessive amounts of solid waste), section 9-6.103(g) (outdoor storage of scrap, junk and miscellaneous articles), and use of storage sheds as habitation units in violation of Health & Safety Code Section 17920.3(k). (Tomac Dec., ¶ 4.) City staff red-tagged the residence, meaning the structure cannot be entered, and yellow-tagged the storage sheds, meaning the structure may not be entered except to remove items. (Tomac Dec., ¶ 5.)

On September 28, 2025, two people living in the residence on the Property were cited for violating section 8-2.101(c) of the Atascadero Municipal Code and a Stop Work Order was posted on the Property in addition to new red and yellow tags to replace tags that had been removed. (Tomac Dec., Dec., ¶ 6.) Ms. Tomac spoke with Souza, who was the primary contact regarding the Property, and reiterated that no one could occupy the Property and the rubbish needed to be removed. (Id.)

In an October 16, 2025, conversation Souza told Tomac she had no money to clean up the Property and no plans had been submitted to the City for remediation of the Property. (Tomac Dec., ¶ 7.) On November 10, 2025, Ms. Tomac posted a notice to abate substandard conditions on the Property. The notice ordered the occupants to abate all nuisance conditions on the Property within 10 days. Ms. Tomac determined that the severity of these conditions make the Property a substantial danger to life and safety. (Tomac Dec., ¶ 8.)

As of December 22, 2025, the nuisance conditions on the Property had not been abated and draft Petition for Receivership was posted at the Property and mailed to the Property, which address noted in City records for the current owner of the Property. (Tomac Dec. ¶ 9 (misnumbered 8.)

City also submits the Declaration of City of Atascadero Police Officer Warren Pittenger (Pittenger Dec.) who states that he executed a search warrant at the Property on July 25, 2025, and observed indicia of illicit drug use on the Property, including equipment used in the sale of illicit drugs, as well as methamphetamine pipes and tinfoil with visible burn marks on it. (Pittenger Dec., ¶ 2.) Mr. Pittenger searched the purse of an occupant of the Property and found a powdery substance and a rock-like substance that the occupant confirmed was fentanyl and methamphetamine. (Pittenger Dec., ¶ 3.)

Photographs of the Property submitted by City substantiate the Property is not fit for human habitation and is a nuisance and danger to the public. (Tomac Dec., Exh. A; Pittenger Dec., Exh. A.)

City has established that it gave repeated notice of violations and afforded the owner a reasonable opportunity to correct the conditions cited in the notice of violation. (See, City of Santa Monica v. Gonzalez (2008) 43 Cal.4th 905 (City Santa Monica).)

City proposes that Mark S. Adams, President of the California Receivership Group, Inc. (CRG), be appointed receiver. Mr. Adams declares that he, as President of CRG, has been appointed as a receiver by 197 different Superior Court Judges and one United States District Court Judge, and that he has overseen the abatement of thousands of units of housing across 419 different nuisance properties throughout the state. (Declaration of Mark S. Adams (Adams Dec.), ¶ 2.)

The Adams Dec. and attached exhibits demonstrate the proposed receiver’s capacity and expertise to develop and supervise a viable financial construction plan for the satisfactory rehabilitation of the Property.

A receiver is an agent and officer of the appointing court and represents all persons interested in the property. (City of Santa Monica, supra, 43 Cal.4th at 930.) “Property in receivership remains under the courts control and continuous supervision, and the importance of such supervision cannot be overstated.” (Id. [citation omitted].) The proposals of a receiver appointed under HSC section 17980.7, whether to repair, demolish, sell, etc., are subject to Court approval and the property owner’s wishes are a legitimate factor for the trial court to consider in determining whether to approve a receiver’s proposal. (Id. at 934.)

Should the receiver seek to repair or demolish dangerous structures, etc. rather than sell the Property as Souza indicates, Souza will have an opportunity to be heard.

III. Ruling

City’s Petition for Appointment of Receiver is granted.

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